A month since Britain was downgraded by Moody's, Fitch put the country on review and said a downgrade was a heightened possibility. A decision is due by the end of April, Fitch said in a statement.
Sterling fell sharply, dropping half a cent against the dollar.
The review announcement comes hard on the heels of the government's annual budget this week, which halved Britain's growth forecast for this year and raised borrowing projections.
The move by Fitch was not unexpected but will be another setback for finance minister George Osborne. He has staked his reputation on repairing Britain's public finances and had promised to protect its triple-A rating.
"But we are, slowly but surely, fixing our country's economic problems," a Treasury spokesman said, citing a reduction by one third of the budget deficit and the creation of 1.25 million jobs since the government took office in 2010. (more)
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